UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2005

                                       Or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

Commission File No. 0-8693


                              TRANSNET CORPORATION
                              --------------------
             (Exact name of registrant as specified in its charter)


           DELAWARE                                       22-1892295
--------------------------------            ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)


45 Columbia Road, Somerville, New Jersey                  08876-3576
----------------------------------------              --------------------
(Address of principal executive offices)                  (Zip Code)


Registrant's Telephone Number, Including Area Code: 908-253-0500


--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

     Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
    1934 during the preceding 12 months (or for such shorter period that the
   registrant was required to file such reports), and (2) has been subject to
                 such filing requirements for the past 90 days.
                                                               Yes _X_    No ___

   Indicate by check mark whether the registrant is an accelerated filed (as
                   defined in Rule 12b-2 of the Exchange Act)
                                                               Yes ___    No _X_

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 3, 2005: 4,818,304.


<PAGE>

                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS



                                                                        PAGE NO.
PART I.  FINANCIAL INFORMATION

         Consolidated Balance Sheets
                  March 31, 2005 (unaudited) and June 30, 2004              1


         Consolidated Statements of Operations (unaudited)
                  Three Months Ended March 31, 2005 and 2004                2
                  Nine Months Ended March 31, 2005 and 2004                 3


         Consolidated Statements of Cash Flows (unaudited)
                  Nine Months Ended March 31, 2005 and 2004                 4


         Notes to Consolidated Financial Statements                         5


     Item 2.  Management's Discussion and Analysis                          8


     Item 4.  Controls and Procedures                                      11


PART II.  OTHER INFORMATION

     Item 4.  Submission of Matters to a Vote of Shareholders              12

     Item 6.  Exhibits and Reports on Form 8-K                             12

     Signatures                                                            12
     Certifications                                                        13


                                       i.



<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    March 31,             June 30,
                                                                                     2 0 0 5               2 0 0 4
                                                                                     -------               -------
                                                                                   (unaudited)
<S>                                                                             <C>                <C>
ASSETS:
CURRENT ASSETS
   Cash and Cash Equivalents                                                    $     4,128,853    $      7,064,644
   Accounts Receivable - Net                                                          4,453,526           3,902,458
   Inventories                                                                        1,658,161           1,131,503
   Other Current Assets                                                                 141,796                   0
   Deferred Tax Asset                                                                   582,479             195,649
                                                                                ---------------    ----------------

   TOTAL CURRENT ASSETS                                                         $    10,964,815    $     12,294,254

PROPERTY AND EQUIPMENT - NET                                                            548,053             438,251


OTHER ASSETS                                                                            329,113             231,104
                                                                                ---------------    ----------------

   TOTAL ASSETS                                                                 $    11,841,981    $     12,963,609
                                                                                ===============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Accounts Payable                                                             $       453,922    $        364,228
   Accrued Expenses                                                                     177,203             210,022
   State Taxes Payable                                                                    8,000               9,826
   Floor Plan Payable                                                                   229,791           1,052,021
                                                                                ---------------    ----------------

   TOTAL CURRENT LIABILITIES                                                    $       868,916           1,636,097

DEFERRED TAX LIABILITY                                                                   58,220              30,976

COMMITMENTS AND CONTINGENCIES                                                                --                  --

STOCKHOLDERS' EQUITY:
   Capital Stock - Common, $.01 Par Value, Authorized
   15,000,000 Shares; Issued 7,403,524 and
   7,391,024 Shares at March 31, 2005 and June 30, 2004
     [of which 2,585,220 are in Treasury
     at March 31, 2005 and June 30, 2004]                                                74,035              73,910

   Paid-in Capital                                                                   10,574,720          10,559,445

   Retained Earnings                                                                  7,418,925           7,816,016
                                                                                ---------------    ----------------

   Totals                                                                            18,067,680          18,449,371
   Less:  Treasury Stock - At Cost                                                   (7,152,835)         (7,152,835)
                                                                                ---------------    ----------------

   TOTAL STOCKHOLDERS' EQUITY                                                        10,914,845          11,296,536
                                                                                ---------------    ----------------

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $    11,841,981    $     12,963,609
                                                                                ===============    ================
</TABLE>



See Notes to Consolidated Financial Statements.


                                                                               1
<PAGE>

                      TRANSNET CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 THREE MONTHS ENDED MARCH 31,
                                                                                 ----------------------------
                                                                               2 0 0 5                    2 0 0 4
                                                                               -------                    -------
<S>                                                                    <C>                       <C>
REVENUE:
     Equipment Sales                                                   $         3,600,863       $          3,283,777
     Service                                                                     3,814,034                  3,572,076
                                                                       -------------------       --------------------

TOTAL REVENUE                                                                    7,414,897                  6,855,853
                                                                       -------------------       --------------------

COST OF REVENUE:
     Equipment Sales                                                             3,387,951                  3,004,255
     Service                                                                     2,833,612                  2,811,185
                                                                       -------------------       --------------------

TOTAL COST OF REVENUE                                                            6,221,563                  5,815,440
                                                                       -------------------       --------------------

     GROSS PROFIT                                                                1,193,334                  1,040,413

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                     1,752,618                  1,498,247
                                                                       -------------------       --------------------

OPERATING (LOSS)                                                                  (559,284)                  (457,834)
                                                                       -------------------       --------------------

OTHER INCOME:
     Interest Income                                                                14,602                     13,004

(LOSS)  BEFORE INCOME TAXES                                                       (544,682)                  (444,830)

INCOME TAXES (BENEFIT)                                                            (124,403)                        --
                                                                       -------------------      ---------------------

NET (LOSS)                                                             $          (420,279)     $            (444,830)
                                                                       ===================      =====================

BASIC NET (LOSS) PER COMMON SHARE                                      $             (0.09)     $               (0.09)
                                                                       ===================      =====================

DILUTED NET (LOSS) PER COMMON SHARE                                    $             (0.09)     $               (0.09)
                                                                       ===================      =====================

Weighted Average Common Shares Outstanding - Basic                               4,818,304                  4,774,804
                                                                       ===================      =====================

Weighted Average Common Shares Outstanding - Diluted                             4,943,751                  4,948,671
                                                                       ===================      =====================
</TABLE>



See Notes to Consolidated Financial Statements.

                                                                               2
<PAGE>

                      TRANSNET CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             NINE MONTHS ENDED MARCH 31,
                                                                             ---------------------------
                                                                             2 0 0 5                   2 0 0 4
                                                                             -------                   -------
<S>                                                               <C>                         <C>
REVENUE:
     Equipment Sales                                              $         14,089,878        $       12,115,654
     Service                                                                11,681,524                11,761,121
                                                                  --------------------        ------------------

TOTAL REVENUE                                                               25,771,402                23,876,775
                                                                  --------------------        ------------------

COST OF REVENUE:
     Equipment Sales                                                        12,992,094                10,933,160
     Service                                                                 8,494,606                 9,000,272
                                                                  --------------------        ------------------

TOTAL COST OF REVENUE                                                       21,486,700                19,933,432
                                                                  --------------------        ------------------

     Gross Profit                                                            4,284,702                 3,943,343

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                 5,076,809                 4,403,175
                                                                  --------------------        ------------------


OPERATING (LOSS)                                                              (792,107)                 (459,832)
                                                                  ---------------------       ------------------

OTHER INCOME:
     Interest Income                                                            35,429                    49,335

(LOSS) BEFORE INCOME TAXES                                                    (756,678)                 (410,497)

INCOME TAXES (BENEFIT)                                                        (359,587)                       --
                                                                  ---------------------       ------------------

NET (LOSS)                                                        $           (397,091)       $         (410,497)
                                                                  =====================       ==================

BASIC NET (LOSS) PER COMMON SHARE                                 $              (0.08)       $            (0.09)
                                                                  =====================       ==================

DILUTED NET (LOSS) PER COMMON SHARE                               $              (0.08)       $            (0.09)
                                                                  =====================       ==================

Weighted Average Common Shares Outstanding -Basic                            4,818,304                 4,774,804
                                                                  =====================       ==================

Weighted Average Common Shares Outstanding -Diluted                          4,818,304                 4,774,804
                                                                  =====================       ==================
</TABLE>


See Notes to Consolidated Financial Statements.

                                                                               3
<PAGE>

                      TRANSNET CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                NINE MONTHS ENDED MARCH 31,
                                                                                ---------------------------
                                                                            2 0 0 5                2 0 0 4
                                                                            --------               -------
<S>                                                                    <C>                    <C>
Operating Activities:
       Net  (Loss)                                                     $      (397,091)       $       (410,497)
                                                                       ----------------       -----------------
       Adjustments to Reconcile Net Income
         to Net Cash:
       Depreciation and Amortization                                           110,713                  95,905
       Deferred Tax Benefit                                                   (386,830)                     --

Changes in Assets and Liabilities:
       (Increase) Decrease in:
       Accounts Receivable                                                    (551,068)                460,043
       Inventory                                                              (526,658)               (306,287)
       Other Current Assets                                                   (141,796)                 (1,631)
       Other Assets                                                            (98,756)                 13,034

       Increase (Decrease) in:
       Accounts Payable and Accrued Expenses                                    56,875                (116,455)
       Other Current Liabilities                                                    --                      --
       Deferred Tax Liabilities                                                 27,244                      --
       Income Taxes Payable                                                     (1,826)                 (9,599)
                                                                       ----------------       -----------------


Total Adjustments                                                           (1,512,102)                135,010
                                                                       ----------------       ----------------

Net Cash - Operating Activities                                             (1,909,193)               (275,487)
                                                                       ----------------       -----------------

Investing Activities:
       Capital Expenditures                                                   (219,768)               (116,567)
                                                                       ----------------       -----------------

Net Cash - Investing Activities                                               (219,768)               (116,567)
                                                                       ----------------       -----------------

Financing Activities:
       Floor Plan Payable - Net                                               (822,230)               (105,725)
       Stock Options Excercised                                                 15,400                      --
                                                                       ----------------       -----------------

Net Cash - Financing Activities                                               (806,830)               (105,725)
                                                                       ----------------       -----------------
Net (Decrease) Increase in Cash and Cash Equivalents                   $    (2,935,791)       $       (497,779)

Cash and Cash Equivalents- Beginning of periods                        $     7,064,644        $      6,935,623
                                                                       ---------------        ----------------

Cash and Cash Equivalents- End of periods                              $     4,128,853        $      6,437,844
                                                                       ===============        ================

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest                                                               $            --        $             --
Income Taxes                                                           $            --        $             --
</TABLE>


See Notes to Consolidated Financial Statements.


                                                                               4
<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1.)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) Consolidation: The consolidated financial statements include the
       accounts of the Corporation and its wholly owned subsidiary, Century
       American Corporation. Intercompany transactions and accounts have been
       eliminated in consolidation.

       (b) Inventory: Inventory consists of finished goods. The Corporation's
       inventory is valued at the lower of cost (determined on the average cost
       basis) or market.

       (c) Cash and Cash Equivalents: For the purposes of the statement of cash
       flows, the Corporation considers highly liquid debt instruments,
       purchased with a maturity of three months or less, to be cash
       equivalents.

       (d) Earnings Per Share: Earnings per common share - basic are based on
       4,818,304 weighted shares outstanding for the three and nine month
       periods ended March 31, 2005 and 4,774,804 weighted shares outstanding
       for the three and nine months periods ended March 31, 2004. For the three
       and nine month periods ended March 31, 2005, the Corporation had
       outstanding options that were not included in the computation of diluted
       EPS as they are considered anti-dilutive.

       (e) In the opinion of management, the accompanying unaudited consolidated
       financial statements contain all adjustments consisting only of normal
       recurring adjustments necessary to present fairly the financial position,
       the results of operations and cash flows for the periods presented.

       (f) These statements should be read in conjunction with the summary of
       significant accounting policies and notes contained in the Corporation's
       annual report on Form 10-K for the year ended June 30, 2004.

       (g) The results of operations for the three months ended March 31, 2005
       are not necessarily indicative of the results to be expected for the
       entire year.

       (h) In November 2004, the Financial Accounting Standards Board ("FASB")
       issued SFAS No. 151, "Inventory Costs - an amendment to ARB No. 43." This
       statement provides guidance to clarify the accounting for abnormal
       amounts of idle facility expense, freight handling costs, and wasted
       material (spoilage), among other production costs. Provisions of ARB No.
       43 stated that under some circumstances, items such as idle facility
       expense, excessive spoilage and other costs "may" be so abnormal as to
       require treatment as current period charges. This statement requires that
       those items be recognized as current period charges regardless of whether
       they meet the criterion of so abnormal. In addition, SFAS 151 requires
       that allocation of fixed production overheads to the costs of conversion
       be based on the normal capacity of the production overheads to the costs
       of conversion be based on the normal capacity of the production
       facilities. Adoption of the Statement is not expected to have a material
       impact on the financial statements of the Company.

       In November 2004, the FASB issued SFAS No. 152 "Accounting for Real
       Estate time-Sharing Transactions - An amendment of SFAS No. 66 and 67.
       This Statement amends SFAS No. 66. "Accounting for Sales of Real Estate,
       to reference the financial accounting and

                                                                               5
<PAGE>

       reporting guidance for real estate time-sharing transactions that is
       provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
       Estate Time-Sharing Transactions. This Statement also amends SFAS No. 67,
       "Accounting for Costs and Initial Rental Operations of Real Estate
       Projects," to state the guidance for (a) incidental costs and (b) costs
       incurred to sell real estate projects does not apply to real estate
       time-sharing transactions. The accounting for those operations and costs
       is subject to guidance in SOP 04-2. Effective for financial statements
       with fiscal years beginning after June 15, 2005. Adoption of this
       Statement is not expected to have a material impact on the financial
       statements of the Company.

       In November 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
       Assets - an amendment to APB No. 29." This Statement amends Opinion No.
       29 to eliminate the exception for nonmonetary exchanges of similar
       productive assets and replaces it with a general exception for exchanges
       of nonmonetary assets that do not have commercial substance. A
       nonmonetary exchange has commercial substance if the future cash flows of
       the entity expected to change significantly as a result of the exchange.
       Adoption of this statement is not expected to have a material impact on
       the financial statements of the Company.

       In December 2004, the FASB issued SFAS No. 123 (revised 2004),
       "Share-Based Payment" (SFAS No. 123R). SFAS No 123R requires companies to
       recognize in the income statement the grant date fair value of stock
       options and other equity-based compensation issued to employees. SFAS No.
       123R eliminates the intrinsic value-based method prescribed by Accounting
       Principles Board Opinion No. 25, "Accounting for Stock Issued to
       Employees", and related interpretations, that the Company currently uses.
       SFAS No. 123R requires the Company to adopt the new accounting provisions
       beginning on July 1, 2005. Management estimates that the adoption will
       not have a material impact on the financial statements of the Company.

       (i) At March 31, 2005, the Corporation had a stock-based employee
       compensation plan. The Corporation accounts for the plan under the
       measurement principals of APB Opinion No. 25, Accounting for Stock Issued
       to Employees, and related Interpretations. No stock-based employee
       compensation cost is reflected in net income, as all options granted
       under those plans had an exercise equal to the market value of the
       underlying common stock on the date of grant. The following tables
       illustrate the effect on net income and earnings per share if the
       Corporation had applied the fair value recognition provisions of FASB
       Statement No. 123 to stock based employee compensation.




                                                                               6
<PAGE>

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED
                                                                                        MARCH 31,
                                                                                        ---------
                                                                              2 0 0 5             2 0 0 4
                                                                              -------             -------
<S>                                                                   <C>                        <C>
NET [LOSS] INCOME:
   As Reported                                                        $       (420,279)          $  (444,830)

DEDUCT:
   Stock Based Employee Compensation Expense
    Determined under the Fair Value Based Method - Net of Tax                       --                    --
                                                                      ----------------           -----------

   PRO FORMA NET [LOSS] INCOME                                                (420,279)             (444,830)
                                                                      ----------------           -----------

BASIC [LOSS] EARNINGS PER SHARE:
   As Reported                                                        $          (0.09)          $     (0.09)
   Pro-Forma                                                          $          (0.09)          $     (0.09)

DILUTED [LOSS] EARNINGS PER SHARE:
   As Reported                                                        $          (0.09)          $     (0.09)
   Pro-Forma                                                          $          (0.09)          $     (0.09)


                                                                                    NINE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                         ---------
                                                                              2 0 0 5             2 0 0 4
                                                                              -------             -------

NET [LOSS] INCOME:
   As Reported                                                        $       (397,091)          $  (410,497)

DEDUCT:
   Stock Based Employee Compensation Expense
    Determined under the Fair Value Based Method - Net of Tax                   (7,929)                   --
                                                                      ----------------           -----------

   PRO FORMA NET INCOME                                                       (405,020)
                                                                      ----------------           -----------

BASIC EARNINGS PER SHARE:
   As Reported                                                        $          (0.08)          $     (0.09)
   Pro-Forma                                                          $          (0.08)          $     (0.09)

DILUTED EARNINGS PER SHARE:
   As Reported                                                        $          (0.08)          $     (0.09)
   Pro-Forma                                                          $          (0.08)          $     (0.09)
</TABLE>


(2.)   INCOME TAXES
       The Corporation has a deferred tax benefit of $582,479 and a deferred tax
       liability of $58,220 based upon temporary timing differences including
       inventory capitalization, allowance for doubtful accounts, vacation pay
       accruals and depreciation.



                                                                               7

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

Revenues for the three months ended March 31, 2005 were $7,414,897 as compared
with $6,855,853 for the quarter ended March 31, 2004. For the quarter ended
March 31, 2005, the Corporation reported a net loss of $420,279 as compared with
a net loss of $444,830 for the similar period in the prior fiscal year. For the
nine months ended March 31, 2005, revenues were $25,771,402, as compared to
$22,876,775 reported for the similar period in the prior fiscal year, with a net
loss of $397,091 for the nine-month period ended March 31, 2005, compared with a
net loss of $410,497 for the same period in the prior fiscal year. The increase
in revenues for both the three and nine month periods is the result of increased
equipment sales. Results for the three and nine month periods ended March 31,
2005, included tax benefits of $124,403 and $359,587, respectively. Despite a
sluggish IT environment, the Corporation was able to increase revenue levels in
fiscal 2005 as compared to fiscal 2004.

The net loss for the quarter ended March 31, 2005 was primarily attributable to
increased selling, general and administrative expenses. These expenses increased
primarily as a result of the Corporation's expansion of its sales staff based
upon its anticipated growth, particularly in business related to the convergence
of voice, video, and data networks, and internet protocol communications ("IPC")
marketplace. During the quarter, revenues from hardware sales increased due to
increased demand, primarily from the educational market, particularly with
respect to IPC products and services. Service related revenues increased
slightly in conjunction with increased demand for IPC products, though service
revenues continued to be impacted by project delays and a major customer's
budget reductions. The earnings for the three and nine-month periods ended March
31, 2005 include the income tax benefit. The income tax benefit was primarily
derived from the Corporation decreasing the deferred tax asset valuation
allowance recorded at June 30, 2004. The decrease in the deferred tax asset
valuation allowance was recorded in proportion to those existing net operating
losses that the Corporation currently expects to realize in connection with
certain IRS carryback provisions.

During the referenced periods, the Corporation's clients continued to be
conservative in their IT budgetary spending. As a result, management refocused
its attention on utilization rates of its service technicians and selling and
administrative expenses to reduce expenses. Because project delays are
client-based, management cannot determine in which quarters services will be
provided, nor can management give assurances that delays will not be longer than
expected or that orders will be given. During the quarter, the Corporation
received contract awards for IPC products and services. The performance of these
awards will extend over several quarters. In addition, indications of interest
have been received by customers with respect to IPC and security technology,
areas which management has targeted as growth areas for the Corporation.
Management concentrates it efforts on technical service and support, and on
sales of network and system integration products that yield higher profit
margins, and continues its adherence to and implementation of cost control
measures. Service and training related revenues are significant in their
contributions to earnings because these operations yield a higher profit margin
than equipment sales. For the three and nine-month periods ended March 31, 2005
and 2004, respectively, revenues from the provision of service, support,
outsourcing and network integration were largely the result of the Corporation
renewing and/or entering into service contracts with a number of large corporate
clients. Most of these contracts are short-term, usually twelve months or less,
and contain provisions which permit early termination. Although the contracts
generally contain



                                                                               8
<PAGE>

renewal terms, there is no assurance that such renewals will occur. Management
has noted a transition to project based business rather than contract based with
respect to certain support services. The demand for certain legacy support
services, such as help desk, has diminished recently as a result of industry
changes.

During the fiscal years discussed, the computer industry has experienced a trend
of decreasing prices of computers and related equipment. Management believes
that this trend will continue. Industrywide, the result of price erosion has
been lower profit margins on sales, which require businesses to sell a greater
volume of equipment to maintain past earning levels. Another result of the price
decreases has been intensified competition within the industry, including the
consolidation of businesses through merger or acquisition, the initiation of
sales by many manufacturers directly to the end-user, and the entrance of
manufacturers into technical services business. Management believes that the
adoption of policies by many larger corporate customers, which limit the number
of vendors permitted to provide goods and services for specified periods of
time, has further increased price competition.

The Corporation's performance is also impacted by other factors, many of which
are not within its control. These factors include: the short-term nature of
client's commitments; patterns of capital spending by clients; the timing and
size of new projects; pricing changes in response to competitive factors; the
availability and related costs of qualified technical personnel; timing and
customer acceptance of new product and service offerings; trends in IT
outsourcing; product constraints; and industry and general economic conditions.

To meet these competitive challenges and to maximize the Corporation's profit
margin, management has modified its marketing strategy during these years and
has enforced expense controls. Management also utilizes new trends such as
manufacturers' direct shipment and billing of the customers in exchange for
payment to the Corporation of an "agency fee" as a means to reduce equipment
related costs while increasing profits. Management believes that this approach,
although it may impact revenues, insulates the corporation from challenges which
may accompany sudden price decreases, hardware obsolescence and delays
collection of receivables.

Management's current marketing strategy is designed to emphasize provision of
technical services and sales of lower revenue/higher profit margin products
related to service and support operations. In this regard, management continues
its concentration on sales of network and system integration products, and IP
telephony technology, which yield higher profit margins. Management's efforts
include targeting commercial, educational and governmental customers who provide
marketplaces for a wide range of products and services at one time, a
cost-effective approach to sales. These customers often do not have their own
technical staffs and outsource their computer service requirements to companies
such as TransNet. Although there is uncertainty as to the economic future,
management is cautiously optimistic, particularly with respect to education
sales and expansion of its sales of IP telephony products.

Management believes it maximizes profits through concentration on sales of
value-added applications; promotion of the Corporation's service and support
operations; and strict adherence to cost cutting controls. In light of the
above, management emphasizes and continues the aggressive pursuit of an
increased volume of sales of technical service and support programs, and
promotion of its training services. In the near term, the Corporation believes
that product sales will continue to generate a significant percentage of the
Company's revenues. In addition, the Corporation's buying agreement with Ingram
Micro, Inc. enhances the Corporation's competitive edge through product
discounts unavailable through other sources.


                                                                               9
<PAGE>

With respect to selling, general and administrative expenses, actual expenses
increased to 24% of revenue for the quarter and 20% for the nine month period
ended March 31, 2005. This compares to approximately 22% of revenue for the
quarter and 18% for the nine month period ended March 31, 2004. The increases in
fiscal 2005 are primarily attributable to expansion of the Corporation's sales
staff in response to opportunities related to IPC markets. Management continues
its efforts to control administrative and personnel related costs.

Interest income increased in the in the quarter ended March 31, 2005 due to
higher interest rates and decreased for nine month period of fiscal 2005 as
compared to the same periods in fiscal 2004 due to lower amount of funds
invested, as well as a lower interest rate.

To date, inflation has not had a material effect on the Corporation's
operations.

LIQUIDITY AND CAPITAL RESOURCES

There are no material commitments of the Corporation's capital resources.

The Corporation currently finances a portion of its accounts receivable and
finances purchases of portions of its inventory through floor-planning
arrangements under which such inventory secures the amount outstanding. The
amount due under this financing decreased for the quarter and nine-month periods
ended March 31, 2005 due to purchase of equipment through other avenues.
Inventory increased in the quarter and nine-month periods ended March 31, 2005
as compared to the corresponding periods in the prior fiscal year also as a
result of sales orders which were open at the end of the periods.

Accounts receivable increased for the quarter and nine-month period ended March
31, 2005, as compared to the same periods in the prior fiscal year as a result
of increased revenues. Accounts payable similarly increased for the quarter and
nine-month period ended March 31, 2005, compared with the same periods in the
prior fiscal year as a result of purchases required to meet increased revenues.
Cash levels decreased for the three and nine-month periods ended March 31, 2005
as compared to the prior year's periods due to payments of costs associated with
inventory increases to cover open orders, as well as increased accounts
receivable.

For the fiscal quarter and nine months ended March 31, 2005, as in the similar
periods in the prior year, the internal resources of the Corporation were
sufficient to enable the Corporation to meet its obligations.

THE MATTERS DISCUSSED IN MANAGEMENT'S DISCUSSION AND ANALYSIS AND THROUGHOUT
THIS REPORT THAT ARE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT MANAGEMENT
EXPECTATIONS THAT INVOLVE RISK AND UNCERTAINTIES. POTENTIAL RISKS AND
UNCERTAINTIES INCLUDE, WITHOUT LIMITATION: THE IMPACT OF ECONOMIC CONDITIONS
GENERALLY AND IN THE INDUSTRY FOR MICROCOMPUTER PRODUCTS AND SERVICES;
DEPENDENCE ON KEY VENDORS; CONTINUED COMPETITIVE AND PRICING PRESSURES IN THE
INDUSTRY; PRODUCT SUPPLY SHORTAGES; OPEN-SOURCING OF PRODUCTS OF VENDORS; RAPID
PRODUCT IMPROVEMENT AND TECHNOLOGICAL CHANGE, SHORT PRODUCT LIFE CYCLES AND
RESULTING OBSOLESCENCE RISKS; TECHNOLOGICAL DEVELOPMENTS; CAPITAL AND FINANCING
AVAILABILITY; AND OTHER RISKS SET FORTH HEREIN.



                                                                              10
<PAGE>

ITEM 4.  CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer of the Corporation have
concluded, based on their evaluation as of March 31, 2005, that the
Corporation's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Corporation in the reports filed or
submitted by it under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be disclosed by the
Corporation in such reports is accumulated and communicated to the Corporation's
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Corporation's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of such evaluation.








                                                                              11
<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

On March 8, 2005, the Corporation held its annual meeting of shareholders for
the purpose of considering and acting upon the election directors. At the
meeting, the election of both nominated directors was approved.

Election of Directors:

         Name                               Shares Voted
         ----                               ------------

                                       For              Authority Withheld
                                       ---              ------------------
John J. Wilk                        3,810,151                 335,910
Vincent Cusumano                    3,955,261                 190,800


ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

         A. Exhibits -
            31.1 Certification required by Section 302
            31.2 Certification required by Section 302
            32  Certification required by Section 906

         B. Reports on Form 8-K -
            On February 12, 2004, TransNet Corporation filed a Form 8-K under
            Item 9.



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                     TRANSNET CORPORATION
                                     (Registrant)


                                     /s/ Steven J. Wilk
                                     --------------------------------------
                                     Steven J. Wilk, President and
                                     Chief Executive Officer


                                     /s/ John J. Wilk
                                     ---------------------------------------
                                     John J. Wilk,
                                     Principal Financial and Accounting Officer
                                     and Chairman of the Board of Directors



DATE:  May 13, 2005


                                                                              12